Marketing, advertising & media intelligence

Take a look outside and you will see the outdoor advertising industry is booming. Traditional billboards are now competing with digital displays for attention and OMANZ is celebrating a record year. However, is there, perhaps, too much outdoor advertising cluttering public spaces? We chat to OMANZ chair and iSite CEO Wayne Chapman about whether there might be a case of too much of a good thing in the outdoor industry.

This week, the Outdoor Media Association of New Zealand (OMANZ) announced 2015 was a record year as its full-year revenue total of $79,726,406, was a 12 percent increase on 2014.

It is the third year of consecutive growth for OMANZ, since records began, with 2013 up 13 percent and 2014 up 7.2 percent.

OMANZ chair and iSite CEO Wayne Chapman said the trend is set to continue positively this year as it has already started at levels in excess of the previous growth.

The success of outdoor advertising comes at a time when the media industry is fragmenting and media platforms such as TV and newspapers, which traditionally commanded the greater share, are losing relevance to audiences. As a result, marketers and advertisers are turning to outdoor advertising as it has been nurtured by the challenges faced by other media.

The medium has grown parallel to global trends, including increased urbanisation, people spending more time out of home and greater disposable income, as they provide consumers with a greater opportunity to interact and engage with the adverts.

Chapman also says research found that people have a higher degree of tolerance for outdoor advertising compared to other mediums and they are less likely to actively ignore it because it’s a “disruptive medium rather than an interruptive medium”.

Most recently, outdoor advertising’s success has received a boost in the form of digital displays. Chapman says last year there was an acceleration towards the use of digital displays with existing billboards taking on the new technology as advertisers saw the benefits, including real time information.

“Because we are not talking about a static display on a billboard a digital display means the material can be changed out in real time which enables out-of-home to suddenly target advertising categories which previously would have been restricted.”

He gives the example of banks, who are now using digital displays to show interest rates, a difficult task for a static display as the numbers have a tendency to change.

Despite the resulting buzz in New Zealand over the outdoor advertising medium, internationally, some places have shown caution in the face of outdoor advertising as it is seen it to encroach on public spaces.

In 2007, São Paulo, Brazil enforced the Clean City Law which saw outdoor adverts labelled as “visual pollution”. As a result, 15,000 billboards and 300,00 oversized storefront signs were removed.

The move was then followed in by Chennai, India, which banned the erection of billboards along with several US states including Vermont, Maine, Hawaii, and Alaska in 2009.

Paris reduced the number of its billboards by a third in 2011 and Tehran replaced all its 1,500 advertising billboards with art for 10 days last year.

So could New Zealand’s outdoor advertising boom be viewed in the same light?

Chapman says any action against outdoor advertising in New Zealand would be unnecessary because of “tight regulatory rules” and “responsible operators” who establish where it is and is not appropriate to put signage.

In New Zealand, each billboard must be granted consent before it can be erected, a process Chapman says never happened in São Paulo and Chennai which he describes as the “wild west” when it comes to billboards.

“While I don’t have intimate knowledge, what I do know is in some cities where they’ve not had an effective regulatory framework or an environment, people have just done what they like and that has exacerbated the situation to a point where some municipalities have just decided it is easier to ban it altogether.”

All of New Zealand’s councils have different frameworks in place to control the erection of outdoor advertisements, so Chapman gives the example of Auckland’s Proposed Unitary Plan. Alongside topics like housing, it provides guidelines for how billboards and signage should be treated.

Should a billboard or sign not meet the requirements, including appearance, size, level of distraction, Chapman says the council has the right to reject applications, and it does so frequently.

Despite the restrictions in place, Auckland Council once saw value in removing billboards. In late 2006, it proposed the ban of central-city billboards as it wanted to encourage appreciation for the buildings, heritage and natural landscape which were said to be surrounded by “cluttered” billboards.

However, the proposal did not go ahead after the majority of the 500 verbal submissions more than 1700 written submissions, opposed the plan.

Had the proposal gone ahead, an estimated 75 percent of the billboards in Auckland at the time would have been removed from the Queen St valley, an area between Hobson Street to Anzac Avenue, which includes Britomart, Karangahape Road and the Viaduct Harbour.

Chapman says “common sense prevailed” when the decision was made and today that area boasts one of the highest concentrations of outdoor advertising.

Following what he considers to be the rule of thumb, areas with the greatest population will see the greatest number of outdoor adverts because that’s what creates not only the value proposition for the advertisers but also public acceptance of it.

He says people find outdoor adverts appropriate when in a CBD environment or alongside multilane arterial roads rather than on a residential street. Also, in its infancy, is the acceptance of it in public transport areas as advertisers look to take advantage of commuters “dwell time”.

One of the reasons Chapman gives for public acceptance is the understanding of the commercial benefits that surround advertising. He says there is a recognition that adverts on a bus or at its stop not only promote a product, they are in a way, giving back to the community.

“People understand that the council and therefore the rate payers are receiving a benefit for it which in someway goes towards providing services to the community or in the case of an individual, it’s more likely if a commercial land owner has a building and there’s a billboard on it then they are receiving an income which some value of that finds its way into the economy.”

According to the Auckland Council Proposed Unitary Plan, the economic benefits of billboard advertising was estimated by the industry in 2011 to directly contribute approximately $100 million per year to the output to the Auckland economy.

While the commercial opportunities are an incentive for councils to take advertising outside, one place that isn’t doing that is Queenstown. Chapman calls the city an “area of outstanding natural beauty” and the council is cautious not to let billboard take away from that.

“They have a very low tolerance and that’s simply because the tourism dollar and the natural beauty is so important for the community and to the council that it outweighs any commercial consideration around advertising.”

So while Chapman says the growth of outdoor advertising is “terrifically exciting” for OMANZ members, he also says the businesses are also “supportive of working collaboratively and constructively” within the regulations to ensure all adverts are sympathetically integrated into the environment so as to not spoil the heritage or the natural landscapes.

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